Fannie Mae-No Politics (FNMA)

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Reuters weak response to my e-mail

From:
Date: Mar 13, 2014 11:03:12 AM
Subject: RE: Margaret Chadbourn misleading headline
To: <xxx>
Cc: <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>


Dear xxx,

We appreciate your concerns regarding the headline “Senate Banking Leaders reach deal on FNMA/FMCC future." We strenuously disagree, however, that it “single-handedly caused the price of Fannie Mae stock to plummet almost 50 percent.”

First, the headline was accurate. The article was based on an announcement by Senate Banking Committee members Tim Johnson and Mike Crapo, who are, as the Wall Street Journal and Bloomberg both reported in their news stories that day, the committee’s “leaders.” A law to wind down Fannie Mae would take, as you note, a bill that would require approval votes by both the House and Senate as well as the President’s signature. “Senate banking leaders reach deal” hardly signifies passage of a law is imminent. Thus the headline accurately reported the news.

Second, the stock plunge didn’t begin until three hours after the headline crossed the wire. The Reuters story about the plans for legislation moved at 10:03 a.m. on Tuesday, when the stock was trading at $6.17. By 10:27 the stock price had actually risen to $6.35. The stock plunge didn’t begin until 12:57 p.m. FNMA then fell from $6.15 to $3.25 by 2:48 p.m. The stock rose again to $4.50 before closing for the day at $4.03.

Market Watch said, “The sudden plunge was a bit of a head scratcher for analysts, who said that the legislation’s elements were largely expected.” Bloomberg said the shares plummeted “after Edwin Groshans, a managing director at Washington-based equity research firm Height Analytics LLC, described the proposal as holder-negative.”

While it may not be clear why the stock fell on Tuesday, it clearly was not due to the headline on a Reuters article. The headline and story were not hyped nor “a type of reckless journalism,” and there is no reason to impugn the integrity of the reporter who wrote them. Reuters takes seriously its commitment to fair, accurate and bias-free news coverage. No retraction nor reprimand is in order.

Nonetheless, we thank you for contacting us to raise your concerns.

Sincerely,



Brian Moss
Ethics and Standards

Thomson Reuters

Phone: [phone]
Mobile: [phone]

[e-mail]
thomsonreuters.com





From: Biggs, Pete (Reuters)
Sent: Thursday, March 13, 2014 7:24 AM
To: Moss, Brian P. (Reuters)
Cc: Artis, Christopher (Reuters); Burg, Barb (Reuters)
Subject: FW: Margaret Chadbourn misleading headline



Hi Brian,


Please see the comments from a reader below on Margaret Chadbourn’s piece yesterday, which I’m passing along as a market effect was mentioned:

http://www.reuters.com/article/2014/03/11/us-usa-housing-idUSBREA2A0YU20140311



Best,



Pete.



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Pete Biggs
PR, Reuters

Thomson Reuters

Phone: [phone]
Mobile: [phone]
[e-mail]
thomsonreuters.com